Two more banks go down as Ghana completes sector cleanup

ACCRA, Jan. 5 (Xinhua) -- Ghana's central bank announced here late Friday the revocation of the operating licenses of two more banks, Premium Bank and Heritage Bank.

Announcing the decision, Ernest Addison, Governor of Bank of Ghana, said the two years long banking sector cleanup had come to an end, leaving 23 universal banks out of an initial 35.

While Premium Bank had continually breached the capital adequacy ratio(CAR) requirements since December 2017 making it insolvent, it had also not been able to meet the new minimum capital threshold of 400 million Ghana cedis (about 83 million U.S. dollars) as of the December 2018 deadline.

For Heritage Bank, Addison explained that while the bank which was licensed in 2016 was not insolvent, there were anomalies with its licensing, the source of its initial capital and related party transactions.

Assets of the two banks have therefore been awarded to the newly established Consolidated Bank of Ghana(CBG).

This brings to nine the number of banks which collapsed under the sector reforms which started in 2017. While assets of two of those banks were awarded to the Ghana Commercial Bank (GCB), seven have been consolidated under the CBG.

In addition to that, the local branch of Bank of Baroda, an Indian international bank, was also liquidated early this year and its businesses taken over by Stanbic Bank, local branch of Standard Bank of South Africa.

With the cleaning up completed, Addison expressed confidence that the banking sector had become stronger.

"We have completed the clean-up, in two years we are seeing a banking sector which is consolidated, which is more liquid and is more robust," the governor added.